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Showing posts with label expatriate. Show all posts
Showing posts with label expatriate. Show all posts

Tuesday 7 July 2020

Kerala’s next crisis: How to deal with return of lakhs of ‘Gone to Gulf’ people

More than 5 lakh Keralites are expected to return from Gulf & state has to deal with plight of those losing jobs there and erosion of its remittance economy writes BOBBY GHOSH in The Print


   

Gone to Gulf.” That phrase came up a lot in conversations among grown-ups that I overheard as a schoolboy in Kerala during the early 1980s. My father, who managed a lobster-export business in the port of Kochi, was constantly griping about workers who quit on short notice — or none at all — to take up jobs in the Gulf cities of Muscat, Doha or Jeddah.

His friends — executives in rubber or coffee plantations, officials in the state-run shipyard or port authority — had the same problem: a constant exodus of workers, most of them “gone to Gulf.”

The jobs there were usually menial, and Dad harrumphed about Keralites giving up a gig at an air-conditioned lobster-processing plant “to get roasted in the desert sun.” He was astonished when his secretary, a university graduate he had marked for a bright future in the company, gave it up for a job pumping gas in Sharjah.

But neither Dad nor his friends could compete with the salaries being offered in the Persian Gulf countries. In their helplessness, they took empty comfort in making dire predictions of the day when Arab employers, having built all the palaces they could want, would finally send the foolish young Keralites back home, to beg for their old jobs.

Instead, years later, my father would join the exodus, agreeing to manage a small shipyard near Dubai, lured by the prospect of a final payday before retirement. He was not amused when I suggested that he had been inspired by that promising young secretary and “gone to Gulf” himself.

Four decades on, the dark auguries of Dad and his friends are coming true for many Keralites in the Gulf: Their Arab employers are laying them off in large numbers. And not just them, or there. The coronavirus pandemic has been devastating for foreign workers everywhere.

The official numbers have yet to be reported, but it’s safe to say that so far thousands have died and millions have lost their jobs. The impact on their families back home has been doubly debilitating: The loss of income from abroad — often from the sole breadwinner in the family — comes at a time of acute local hardship.

For economies that depend on this foreign income, the outlook for 2020 is bleak. The World Bank expects a 20% plunge in remittances to low- and middle-income countries. This plunge would be the steepest in history, far exceeding the 5% dip after the 2009 global financial crisis. The pain will be felt acutely in Kerala, which has an unhealthy addiction to remittances, and has failed to create alternative opportunities for its labour force.



This loss of income is likely just the start of a long cycle of despair. It will be years before countries that employ large numbers of foreign workers fully recover from the economic damage caused by the pandemic. Even when they do, they will have less room for migrants. Fewer Keralites will have the opportunity to join the ranks of the “gone to Gulf,” with profound economic implications for their families and their state.

Gulf’s localisation


In the petrostates of the Arabian Peninsula, the post-pandemic economic downturn will add impetus to long-standing programs designed to replace foreign workers with locals. Authorities in six member-states of the Gulf Cooperation Council (GCC) have for years been pressing employers — using catchphrases like “Saudization” and “Omanization” — to reduce their dependence on foreigners.

These initiatives have tended to wax and wane with the price of oil: When it is high, unemployed citizens can depend on generous government subsidies, allaying concerns about foreigners taking all the jobs. It helps that many of the jobs done by migrants are unattractive, menial and low-paying.

But years of low oil prices combined with the swelling ranks of unemployed locals have forced authorities to take localization programs more seriously. These programs are at the heart of ambitious economic and social reforms being pursued by new, young rulers like Saudi Arabia’s Crown Prince Mohammed bin Salman, Qatar’s Sheikh Tamim bin Hamad Al Thani and Oman’s Sultan Haitham bin Tariq Al Said.

This reformist zeal is bad news for countries at the other end of the migration chain. Since the fall in oil prices in 2014, remittances from the GCC have plateaued. (In the case of Saudi Arabia, they have fallen precipitously.)




This year, judging by the early indicators, they are projected to go off a cliff. Remittances from the United Arab Emirates to India are expected to drop 35% in the second quarter alone. The UAE is the GCC’s largest source of remittances, and India is their top recipient.

Indeed, India should have experienced a slowing of money flows over the past few years. It bucked the trend in large part due to massive flooding in Kerala in 2018 and 2019, which led to spikes in remittances as Keralites in the Gulf sent home larger-than-usual sums to help with relief and reconstruction.

But that streak is about to be snapped. Unlike previous natural disasters, the pandemic is depleting the flow of money from abroad.



Kerala’s Gulf handicap

Kerala, which has ancient ties to the Gulf, will likely feel the pinch more than other Indian states. It receives nearly a fifth of remittances to the country, most of it from the GCC, whose members are home to between 2 million and 2.5 million Keralites. Although the state government doesn’t publish annual remittance figures, they are thought to consistently account for over a third of Kerala’s GDP.

This dependence leaves the government of Chief Minister Pinarayi Vijayan handicapped even as it grapples with the impact of the pandemic. Kerala was the first Indian state to record a case of Covid-19 — a student who had returned from university in Wuhan, the Chinese ground zero of the crisis. Vijayan, a Marxist who had won acclaim for his adroit administration during the floods in the previous two years, moved quickly to flatten the curve.

Now the pandemic is spiking again, in Kerala as well as across India. With a loss of state revenues due to the effects of the lockdown, Vijayan could really use another surge in remittances from the Gulf. But this time, it is the diaspora that is in distress, and he must deal with the plight of Keralites who are losing their livelihoods in the GCC as well as the anxieties of their families at home.

The state expects more than 500,000 Keralites to return, many of them in the special repatriation flights organized by the Indian government. This figure is almost certainly an underestimate. Many others will make the return journey months from now, as companies and governments cut more jobs in the Gulf. “It will be a long time before we know how many Keralites have come home,” says S. Irudaya Rajan, who researches migration and remittance flows at the Center for Development Studies in Thiruvananthapuram, Kerala’s capital.

Speaking to me privately, some Kerala government officials say they are not especially alarmed about the localization efforts of the Gulf states. The demand for Kerala’s best and brightest, they say, will resume after the pandemic. Just because the authorities want jobs to be filled by locals doesn’t mean there are sufficient numbers of locals who can fill them.

But Shashi Tharoor, a member of India’s parliament from the state, allows that business may never return to usual. “It’s not just about Arabs taking jobs, but the jobs themselves disappearing for good,” he says.

Junaid Ahmad, the World Bank’s country director in India, likens Kerala’s challenge to that of post-conflict countries, where governments must reintegrate former fighters into society, by training and providing them with economic opportunities. Vijayan has to do the same for the returning Keralites, Ahmad says, “but instead of working with a peace dividend, he has to do this despite a loss in remittances.”

What’s more, he has to do it under extreme pressure at a politically inopportune moment. Diaspora groups are a powerful lobbying force in the state, and Vijayan faces elections in less than a year.


The remittances trap

The recalibration of Kerala’s remittance-dependent economy will take longer. The migration of Keralites to the Gulf began in the 1970s; it was already a steady stream when I was a schoolboy in Kochi. By the turn of the century, nearly 1.5 million Keralites lived and worked in the GCC.

Kerala was uniquely positioned to cater to the seemingly insatiable demand for foreign workers from the petrostates. A long maritime history had made Keralites culturally prone to seeking their fortune abroad, and a series of business-unfriendly governments, not all of Vijayan’s Marxist stripe, had prevented the development of a robust private sector at home. (The company that employed my father in Kochi had left Kerala before I finished high school.)

Kerala’s proud record for near-total literacy gave its citizens a leg-up over other Indians — not to mention Pakistanis, Bangladeshis and others — seeking jobs in the Gulf. Despite their better education, the overwhelming majority of Keralites did jobs that indeed required being “roasted in the desert sun,” as Dad put it. In the classic migration pattern, young men endured great physical hardship and forewent luxuries to save up, remit money home and bring over friends and relatives. The steady exodus allowed the state government to get away with its poor economic management; jobs in the Gulf made up for unemployment and remittances fueled consumption. The running joke was that Kerala had a “money-order economy.”

But the money coming from the GCC was rarely put to the most efficient use: Much of it went into personal consumption — families bought gold and property, built homes. Bungalows popped up in formerly poor villages throughout the state.

This spending yielded little employment outside the construction sector, and even there much of the work involved back-breaking labour, hardly in keeping with the aspirations of educated Keralites. In an ironic echo of migration patterns in the Gulf, Kerala began to attract low-cost labour from other Indian states. The remittances were never used to build a significant industrial base, or to develop an information-technology sector comparable to its neighbours. In the absence of a sizeable private sector, “there were no other investment possibilities,” says Reuben Abraham, CEO of the IDFC Institute, a public-policy think tank.

Still the remittances kept growing. In time, Keralites began to climb the value chain abroad, from blue- to white-collar jobs, from construction to banking, insurance and other services. This ascent, in addition to the size of the settled diaspora, meant that although other Indian states sent more workers to the Gulf annually, Keralites were able to send more money home.

Now, Keralites risk becoming victims of their own success: It is those white-collar jobs that are most likely to be localised. “Saudis and Emiratis are not going to work on construction sites,” says Rajeev Mangottil of VPS Healthcare, a large Keralite-owned company that runs a chain of hospitals in the GCC. “Foreigners who are working in offices are very vulnerable right now.”

What happens now

Many tens of thousands have already lost jobs to the pandemic’s economic impact, and it may be months before an accurate count is available. Emirates, the Dubai-based airline and one of the UAE’s largest employers, will eventually trim 30,000 from its rolls. (Dubai, it is worth remembering, was already experiencing its fastest pace of job losses in a decade before the pandemic struck.) Unsurprisingly, hundreds of thousands of Indians have registered for special repatriation flights from the UAE.

Among Keralites who have lost white-collar jobs in Dubai, panic has set in. Few have any expectation of finding work back home, much less work that will sustain the lifestyle they enjoyed in the Gulf. “Those who have lost their jobs but have EMIs (equated monthly installments) to pay are stuck,” says Mangottil. “People are applying for jobs that pay half their previous salaries.” When hope is finally extinguished, they will swell the ranks of returnees to Kerala.

What awaits them allows for little optimism. Top state officials, already working flat out to contain the coronavirus spike, have not yet articulated a strategy for dealing with the returning migrants. The government has announced some self-employment schemes, involving small loans and subsidies. But these were conceived before the pandemic, when the returnees numbered in three or four digits, not six.

The glass-half-full view is that the returnees will bring world-class skills and reserves of experience not easily found in Kerala. S.D. Shibulal, co-founder of the tech giant Infosys and one of the state’s more successful entrepreneurs, reckons that a nascent knowledge industry “offers good opportunities for returnees to invest.”

Putting what the World Bank’s Ahmad calls the “skills dividend” to use, however, will be a challenge for a state where socialist policies and powerful unions have created a reputation for hostility toward business. Kerala ranks 21st among 29 states in the Indian government’s ease-of-doing-business rankings.

Changing that perception will require more than efficient management of natural calamities. Competition for investment is fierce among Indian states and will grow fiercer as investments shrink with a slowdown in the global economy. Even if returning Keralites feel inclined to invest in business, there’s no guarantee they will restrict themselves to their home state.

Some officials argue that it would be short-sighted to focus too much on the returnees and lose sight of Kerala’s competitive advantage in the global labour market. Exporting workers is what the state does best. If demand shrinks in the Gulf, it will eventually pop up elsewhere: It’s a matter of pointing the outflow of migrant Keralites in the right direction. Government energies, these officials argue, are better expended on ensuring that the next generation of leavers has the right skills to compete and succeed wherever opportunities arise.

Even before the pandemic, says Tharoor, “Kerala’s big question has always been, How do we get enough people working abroad and sending money home?” That question is now being asked by the governments of dozens of countries that depend on remittances. The past few months have made finding the answer much more urgent.

Sunday 1 December 2019

WHY DO EXPATS VOTE DIFFERENTLY?

Nadeem F Paracha in the Dawn


Some nine years ago when, I was heading the media department of a British organisation, I got the chance to observe how most British expats in Pakistan voted in the UK 2010 parliamentary elections. Even though most of the Karachi-based British expats that I managed to talk to in this regard were somewhat reluctant to divulge which party they voted for, some eventually did tell.

Nine out of the 12 expats who agreed to reveal the party that they voted for, cast their votes for the Conservative Party. Two voted for the Liberal Democrats and just one claimed to have voted for the Labour Party. Two of them told me that, since the early 1980s, a majority of British expats around the world have preferred to vote for the Conservative Party. British expats have the right to vote in their country’s parliamentary elections, but this right lapses if the expat has remained resident outside the UK for more than 15 years.

Last year in Washington DC, during a round-table session that I attended on the electoral behaviour of expat Americans, most speakers were of the view that a majority of expat Americans tend to vote for the Republican Party. No significant data was shared to corroborate this, but some former US ambassadors attending the session claimed that most expat Americans working in Asian and South American countries vote for the Republican Party and that this has been the trend since 1980.

The session concluded that expats — at least American and British — were likely to vote for conservative parties. This is interesting, because over the last few years, there have been many reports published and columns written about expat Pakistanis and Indians overwhelmingly exhibiting support for centre-right parties such as the PTI and the Bharatiya Janata Party.

Indian expats were given the right to vote in Indian elections only in 2010, but those holding dual nationalities still cannot. Pakistani expats were given this right in October 2018, during the by-elections. Whereas 7,461 expats registered online to vote, only 6,233 cast their votes.

The phenomenon of most Indian and Pakistani expats demonstrating support for the BJP and the PTI has been repeatedly observed by many, but never fully studied. The answers may lie in a hefty study published in the May 2019 issue of the Oxford Academic Journal.

The study conducted by two American political scientists, A.C. Goldberg and Simon Lanz, concentrated largely on European countries. But Goldberg and Lanz argue that the results of the study can be relevant for other countries as well. One of their conclusions was that the voting/support preferences of expats are often contrary to those at home.

This is because their social, political and economic contexts are different. An issue in the country of origin will have a more abstract impact on expats residing in a different environment, hundreds or thousands of miles away. The impact of the same issue on those living in the home country is more tangible and immediate. This might be the reason behind the somewhat different understanding of the issue among the two sets of voters.

An earlier 2006 study, by the Dutch economist Dr Jan Fidrmuc and econometrist Orla Doyle, came to the same conclusion after studying the voting behaviour of Czech and Polish migrants/expats in Asia, Africa, Europe and Latin America. The results of this study indicated that the political preferences of immigrants change significantly because the migrants adapt to the norms and attitudes prevailing in the host country.

Fidrmuc and Doyle found that most Czech and Polish migrants living in European countries tended to vote for right-wing parties at home but, interestingly, those living in African and Middle-Eastern countries preferred left-leaning parties.

The economic and political environments in Europe and Africa and/or the Middle East differ. So expats/migrants in Europe, after experiencing the advantages of developed economies, are likely to understand ‘progress’ in their home country through the lens provided to them by their lived experience in developed countries. Thus they tend to support home parties promising progress along these lines.

But what about expats from developed countries opting to vote for conservative parties? Studies suggest that British and American expats voting for the Conservative Party and Republican Party largely vote to retain their countries’ rarely-changing external policies rather than the more fluid internal matters. They are more impacted by the foreign policies of their home countries than by their countries’ internal, more localised issues.

Findings of both the mentioned studies also more than allude to the fact that, outside the voting patterns of US and UK expats, expat voting can be fickle. Since most expats are likely to vote for the opposition, they can be quick to withdraw their support once the opposition comes to power and is slow to deliver.

Both PTI and BJP enjoyed overwhelming support from Pakistani and Indian expats before both were voted into power. However, the support for the two ruling parties is now receding at home, and there is restlessness within the pro-PTI and pro-BJP Pakistani and Indian diasporas respectively.

Indian PM Narendra Modi and Pakistani PM Imran Khan now apply separate rhetorics for their supporters within and outside the country. Outside their countries, to retain the diaspora’s attention and support, they have to continue sounding like they did when they were in the opposition, whereas the same rhetoric is now failing to stand up to a plethora of economic and political problems at home.

Indian historian Meera Nanda writes in The God Market that the changing worldview of the Indian middle classes (and diaspora) is being shaped by the “state-temple-corporate complex.” Rich Indians are heavily investing in this by fusing Hindu nationalism with modern economics. This combination excites the Indian diaspora and they identify it with Modi. But what happens when the corporate is finally swallowed by Hindu zealotry and leaves behind only Hindu nationalism?

On the other hand, what excited the Pakistani diaspora about PM Khan was the manner in which he tapped into the Pakistani diaspora’s engagement with contemporary identity politics, especially in the West. He did this by clubbing together displays of religiosity, anti-corruption tirades, populist post-colonialist rhetoric and lofty allusions to Scandinavian social democracy — which is curiously explained by him as an Islamic concept.

Whereas identity politics can lead to some awkward ethnic and sectarian tensions in Pakistan, it works well on the Pakistani diaspora. Therefore, the gap between the understanding of present-day Pakistani politics between the expats and the locals has continued to grow. Some locals have lamented that expats are still stuck in 2014, or in PTI’s more glamorous dharna years.